The following shows the first month of operations for SURPASS INC. Customized Systems. For the operations ordered 1-17, prepare Journal Entries and T-Accounts through operations 1-17.

PART 1&2: Journal Entries and T-Accounts This is the first month of operations for SURPASS INC. Customized Systems 1. 8/1/2020 SURPASS INC. issued 100,000 of its total 300,000 shares that it was authorized to sell. SURPASS INC. sold the Common Stock for $12 per share. 2. 8/1/2020 SURPASS INC. bought office equipment from Osteen Equipment for $100,000 by putting $21,000 down with Check No. 1744 and issuing a note payable for the balance. The annual interest rate was 14% and the interest was payable on a monthly basis beginning September 1st. The equipment had a 5-year useful life and a $2,000 salvage value. 3. 8/3/2020 SURPASS INC. prepaid twelve months rent to Jakes Realty of $130,000 with Check No. 1743. 4. 8/8/2020 SURPASS INC. contracted Ravi Publicists to run an advertising campaign for the month of August. The company paid $35,000 by writing Check No. 1745. 5. 8/12/2020 SURPASS INC. ordered office supplies from Staples that cost a total of $50,000. Check No. 1746 was written for the order that was delivered the same day. 6. 8/15/2020 SURPASS INC. purchased Inventory of customizable systems for resale from Weece Inc. The total cost of the Inventory was $400,000 and it was purchased with terms 4/20, n/45. The company records all purchases at net amounts. 7. 8/18/2020 SURPASS INC. sold 75% of the inventory. The policy was to mark up the items by 60% above the cost; the selling price was therefore 160% of the cost. The company added 9.75% for sales tax to the Sales Price to account for taxes assessed by State and Local Government. The Sales Tax was recorded in a Sales Tax Payable account at the point of sale to be remitted to the government the following month. It was not recorded as Sales. Sales Terms are n/30. 8. 8/20/2020 SURPASS INC. wrote Check No. 1747 for liability insurance expense for August to Stanley Underwriters for $500. 2 9. 8/25/2020 SURPASS INC. reacquired 15,000 of its own shares at $20 per share by writing Check No. 1748 to Trust Brokerage Services. Reacquired shares are labelled as Treasury Stock. 10. 8/26/2020 SURPASS INC. wrote Check No. 1749 for August utility services to Hart Utilities for $1,249. 11. 8/27/2020 SURPASS INC. paid 80% of the amount owed for the inventory purchased to Weece Inc. with Check No. 1750. Remember these were recorded at net. 12. 8/30/2020 SURPASS INC. paid office salaries expense [i.e. Gross Pay) of $100,000 to five employees. The company withheld taxes from the paycheck of each employee in the following amounts or precents: Federal Income Tax withheld was $15,000 were to be remitted next month Social security taxes @ 6.2% of gross pay was to be remitted next month Medicare taxes @1.45% of gross pay were to be remitted next month Retirement contributions withheld for $10,000 were to be remitted next month to a brokerage firm The company wrote checks as follows for the Net Pay as indicated below: Employee 1 Check No. 1751 $. 6,735.00 Employee 2 Check No. 1752 $16,837.50 Employee 3 Check No. 1753 $20,205.00 Employee 4 Check No. 1754 $ 8,082.00 Employee 5 Check No. 1755 $15,490.50 . . 13. 8/30/2020 SURPASS INC. recorded Payroll Tax Expense on the Salaries Social security taxes @ 6.2% of gross pay was to be remitted next month Medicare taxes @1.45% of gross pay were to be remitted next month Federal Unemployment of 5.4% on $28,000 were to be remitted next month 14. 8/30/2020 $20,000 SURPASS INC. paid Sales Commissions Expense [i.e. Gross Amount] of $ to two employees. The company withheld taxes from the paycheck: No Federal Income Tax was withheld Social security taxes @ 6.2% of gross pay were to be remitted next month Medicare taxes @1.45% of gross pay were to be remitted next month The company wrote checks as follows for the Net Pay of the Commissions as indicated below: Employee 6 Check No. 1756 $11,082.00 Employee 7 Check No. 1757 $7,388.00 . 15. 8/30/2020 SURPASS INC. recorded Payroll Tax Expense on the commissions paid Social security taxes @ 6.2% of gross pay were to be remitted next month Medicare taxes @1.45% of gross pay were to be remitted next month No unemployment taxes were withheld 16. 8/31/2020 SURPASS INC. mailed a dividend check to its sole shareholder Amelia Hart for $4,218.87 with Check No. 1758 17. 8/31/2020 SURPASS INC. received a check from a client for $25,000 and made the deposit at the end of the day at 4:30PM which was after the bank cut-off period. Deposits made after 2:00PM would show up on the next business day bank statement. The product would not be delivered to the customer until September 154